Week 3 Lecture Topics Week Three Topic 1: Individual Differences Topic 1.1 | Topic 1.2 | Topic 1.3 Topic 1.1: Persuasive Argument Persuasion can be defined as the capacity or power to persuade or be persuaded; to cause, induce, or influence someone by reason, argument or entreaty into a determination, decision, conclusion, belief, or modified behavior. In other words, persuasion is the process of convincing an opponent to change his or her beliefs and/or behavior through moral or logical argument (rather than force or power). When someone is persuaded to do something, they do it because they have come to believe it is the right thing or the best thing to do. This \"persuaded\" behavior or belief change is likely to be much more reliable and permanent than change brought about by force. When people are forced to do something they don't want to do, they usually watch for their next opportunity to retaliate against their opponent, or reverse the unwanted decision. Persuasion plays a crucial role in successful negotiations as well as conflict resolution. It has been found that negotiated settlements often fail if one or more of the parties to the settlement do not truly believe that the terms or in their best interest. For a negotiated settlement to stand the test of time, both parties have to be persuaded that the settlement is beneficial. In order for persuasion to be successful, it must be based on commonly held beliefs and/or values. If a disputant bases his or her arguments on selfish or one-sided principles, these principles will almost certainly be rejected (and persuasion will fail). If they base their argument on generally held values of fairness that all sides can agree to, the persuasive effort is much more likely to succeed. Even when common ground cannot be found, a debate about the relative merits of competing value systems is far preferable and more constructive than the "might-makes-right" (power negotiating) pursuit of purely selfish motives. For more on the topic, please refer to your course outline for reading assignments from the text, and link to the sites below: http://www.negotiatormagazine.com/article234_1.html http://www.retailcrossing.com/article/index.php?id=350059 http://www.burrese.com/ Back To Top Topic 1.2: Gender Based Differences Most of us would admit that men and women have some differences beyond just the physical. Ask a man to describe negotiation and he's likely to compare it to a ball game or a wrestling match. Women, on the other hand, many find it more like going to the dentist. By a factor of 2.5, more women than men feel a "great deal of apprehension" about negotiating, reports economist Linda Babcock, of Carnegie Mellon. Women go to great lengths to avoid the bargaining process - paying almost <,400 more to avoid negotiating the price of a car. (That may explain why 63 percent of those who buy cars made by Saturn, a company that promises a no-haggle price, are women.) But "failing to negotiate her salary just once will cost a woman >00,000 over the course of her career," explains Babcock. She suggests three things for women to get more of what they want: 1. Commit: "Given that 20 percent of adult women say they never negotiate at all, the most important thing to do is to decide to use negotiation in the first place." 2. Practice: Negotiate little things, even crazy items that are never bargained for, like the price of fish at the fish market. As with most behaviors, she says, it gets easier the more you do it. 3. Get to 'No': If you never hear "no," when you negotiate, you haven't asked for enough. Can women negotiate a deal as well as their male counterparts? The answer is, of course, and in some cases they may even do a better job. Women may have an edge at the negotiating table because of their instincts and natural power of persuasion. Women usually look for a win/win in negotiations. In Getting to Yes, the classic book on negotiation by the Harvard Negotiation Project, it was reported that the win/win strategy work best in negotiations. In order to avoid future resentments, all parties should come away feeling good about the resolution of a problem. Men traditionally treat the process as whomever is on the other side in negotiations is the adversary. Women, however, tend to want to develop a relationship with the other person and take into account the needs and difficulties of both sides. Women also tend to collaborate and help one another if problems arise. Negotiating is a critical skill for anyone aspiring to succeed in the business world. For those women who feel they are not good negotiators, they simply need to remember their natural talent of persuasion. Keep in mind even good negotiators will sometimes make mistakes. The key to avoiding these mistakes are: (1) attack the problem and not your adversary; (2) try to come up with several options; (3) never treat negotiations as a contest; (4) never threaten and (5) never give in to something that is contrary to what you believe is ethical. For more on the topic, please refer to your course outline for reading assignments from the text, and link to the sites below: http://www.apa.org/monitor/julaug07/women.html http://www.microsoft.com/nz/smallbusiness/issues/women/negotiation.mspx http://www.awib.org/content_frames/articles/negotiating.html Back To Top Topic 1.3: Choosing to Be a Negotiator When deciding if one wants to become a negotiator, it is important to reflect on those characteristics that make a successful negotiator. When considering the makeup of a savvy negotiator, watch and listen to the manner someone interprets unspoken words. In particular, observe their perception of that which is not said. Being able to read and accurately interpret body language will give a savvy negotiator additional insight into the inner thoughts of the person with whom they are negotiating. Being able to identify the problem, understand it from the other's perspective, generate alternative solutions, and select a solution that benefits both sides are all characteristics of good negotiators. All parties need each other to achieve their goals. Negotiation focuses on solving the problem and closing the gab between what both parties want. If you wish to test someone's negotiation skills, stop speaking in mid sentence and see how they respond. Take note of whether they're able to pick up on the fact that 'something' happened and if they can tell you where you were in the conversation and where you were headed. You'll receive great insight from this informal research as to the potential negotiation capabilities they possess - as well as an understanding of your own abilities to adjust to the nuances within negotiations. The following are attributes and characteristics associated with successful negotiators: 1. Preparation and planning skill 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. Knowledge of the subject Ability to think clearly and rapidly under pressure and uncertainty Ability to express thoughts verbally Listening skill Judgment and general intelligence Integrity Ability to persuade others Patience Decisiveness Ability to win respect and confidence of opponent General problem-solving and analytical skills Self-control, especially of emotions and their visibility Insight into others' feelings Persistence and determination Ability to perceive and exploit available power to achieve objective Insight into hidden needs and reactions of own and opponent's organization Ability to lead and control members of own team or group Previous negotiating experience Personal sense of security Open-mindedness (tolerance of other viewpoints) Competitiveness (desire to compete and win) Skill in communicating and coordinating various objectives within own organization Debating ability (skill in parrying questions and answers across the table) Willingness to risk being disliked Ability to act out skilfully a variety of negotiating roles or postures Status or rank in organisation Tolerance to ambiguity and uncertainty Skill in communicating by signs, gestures and silence (non-verbal language) Compromising temperament Attractive personality and sense of humor (degree to which people enjoy being with the person) 32. Trusting temperament 33. Willingness to take somewhat above-average business or career risks 34. Willingness to employ force, threat or bluff (if necessary to move the negotiations along) In choosing to be a negotiator it is important to keep in mind that these skills can be learned, but that preparation and practice are essential to make the skills required part of your negotiating repertoire. For more on the topic, please refer to your course outline for reading assignments from the text, and link to the sites below: http://www.negotiation.com/becoming-complete-negotiator.html Back To Top Week Three Topic 2: Influences of Culture On Negotiations Topic 2.1 | Topic 2.2 | Topic 2.3 Topic 2.1: Negotiation and Culture Negotiating across cultures focuses on two areas: differences in the negotiation game between cultures, and how negotiators might change their approach (or even their mental models) to bring about better negotiation. In the first area, research has focused most actively on the cultural dimension referred to as "individualism-collectivism." This research has revealed that negotiators from certain cultures - i.e. United States, Great Britain, or the Netherlands - appear more concerned with maintaining individual rights, while others - i.e. Colombia, Pakistan, Taiwan, for example focus more on preserving collective relationships. The first group is more likely to resort to competition and problem solving in the negotiation; the second prefers more indirect means of arriving at a solution. Less research attention to date has addressed three other important dimensions of crosscultural interaction. These include power distance (how social hierarchies affect negotiation), context of communication (the degree to which messages inherit meaning from the context in which they are delivered), and different conceptions of time (whether negotiators from certain cultures prefer to handle issues in a sequential or simultaneous fashion). Other research suggests that negotiators might deliberately change the negotiation process across cultures, either by transcending their own cultural background or by joining with the opposing party in utilizing culture model with which both negotiators are familiar. While these methods appear reasonable in theory, the jury is still out on whether or not they are viable for the typical negotiator. While different cultures and religions have widely differing views about morality, fairness, and justice, there are often important areas of common ground that can serve as a basis for powerful persuasive efforts. The United States, for example, has a long-standing belief in the concept of equality before the law. Martin Luther King was able to make great strides toward increasing the rights of African-Americans by arguing that denying African-American equal rights was a violation of that principle. For more on the topic, please refer to your course outline for reading assignments from the text, and link to the sites below: http://hbswk.hbs.edu/item/1517.html http://www.negotiation.biz/cross_border_negotiations.htm Back To Top Topic 2.2: Intercultural Effects on International Business The increasingly global business environment requires an approach to the negotiation process from the global businessperson's point of view. This approach includes aspects that are usually unimportant in domestic negotiations. Some of the components of a cross cultural negotiation process are more complex and difficult, but will increase opportunities for success in avoiding cultural barriers and failures in the international business arena. The following are factors to consider when doing business internationally (Salacuse, 1991): 1. 2. 3. 4. 5. 6. 7. The negotiating environment; Cultural and sub-cultural differences; Ideological differences; Foreign bureaucracy; Foreign laws, including patent and trademark, and governments; Financial insecurity due to international monetary factors; Political instability and economic changes. If we consider the fact that negotiating with our fellow citizen is not an easy task due to many individual differences, it would be reasonable to suggest that negotiating with foreigners may prove even more difficult. The way we perceive and create our own reality may be completely different to our counterpart's way of thinking, behaving and feeling. Unfortunately, knowledge of any foreign language is not enough to face and solve the problem. Language is a cluster of codes used in communication that, if not shared effectively, can act as a barrier to establish credibility and trust. We need more effective tools, and the most important is knowledge of all factors that can influence the proceedings. Nations tend to have a national character that influences the type of goals and process the society pursues in negotiations. This is why specifying and understanding cultural differences is vital in order to perform successfully in inter-cultural communication (Schuster-Copeland 1996, 33). A better understanding of the fact that international players may see things differently we make it less likely that negative assumptions will result and more likely that progress will be made when negotiating. Other factors influencing cross-cultural negotiations include: Negotiating Goal and Basic Concept: Different cultures stress different aspects of negotiation. The goal of business negotiation may be a substantive outcome (Americans) or a long-lasting relationship (Japanese). Protocol: There are as many kinds of business etiquette as there are nations in the world. Protocol factors that should be considered are dress codes, number of negotiators, entertainment, degree of formality, gift giving, meeting and greeting, etc. Communications: Verbal and non-verbal communication is a key factor of persuasion. The way we express our needs and feelings using body language and tone of voice can determine the way the other side perceives us, and in fact positively or negatively contributes to our credibility. Another aspect of communication relevant to cross-cultural negotiation is the direct or indirect approach to exchanging information. Is the meaning of what is said exactly in the words themselves? For example, does \"...it's impossible\" really mean impossible or just difficult to realize? Always use questions to identify the other side's needs, otherwise assumptions may result in you never finding common interests. Risk-Taking Propensity: There is always risk involved in negotiations. The final outcome is unknown when the negotiations commence. The most common dilemma is related to personal relations between counterparts: Should we trust them? Will they trust us? Certain cultures are more risk averse than others, e.g. Japan (Hofstede 1980). It means that less innovative and creative alternatives are available to pursue during the negotiation, unless there is a strong trust-based relationship between the counterparts. Importance of Time: In some cultures time is money and something to be used wisely. Punctuality and agenda may be an important aspect of negotiation. In countries such as China or Japan, being late would be taken as an insult. Consider investing more time in the negotiating process in Japan. The main goal when negotiating with an oriental counterpart is to establish a firm relationship, which takes time. Another dimension of time relevant to negotiation is the focus on past, present or future. Sometimes the past or the distant future may be seen as part of the present, especially in Latin American countries. Decision-Making System: The way members of the other negotiating team reach a decision may provide a hint as to who should be focused on while presenting one's position. When negotiating with a team, it's crucial to identify who is the leader and who has the authority to make a decision. Form of Agreement: In most cultures, only written agreements evidence the close of a deal. It seems to be the best way to secure our interests in case of any unexpected circumstances. The 'deal' may be the contract itself or the relationship between the parties, like in China, where a contract is likely to be in the form of general principles. In this case, if any unexpected circumstances arise, parties prefer to focus on the relationship than the contract to solve the problem. It is very important to know the basic components of the counter-party's culture. It's a sign of respect and a way to build trust and credibility as well as advantage that can help us to choose the right strategies and tactics during the negotiation. Of course, it's impossible to learn another culture in detail when we learn at short notice that a foreign delegation is visiting in two weeks' time. Even then one should try to identify principal influences that the foreign culture may have on making the deal. Don't stereotype: Making assumptions can create distrust and barriers that expose both your and the other side's needs, positions and goals. The way we view other people tends to be reserved and cautious. We usually expect people to take advantage of a situation, and during the negotiations the other side probably thinks the same way, especially when there is a lack of trust between counterparts. Instead of generalizing, we should make an effort to treat everyone as individuals. Find the other side's values and beliefs independently of values and beliefs characteristic of the culture or group being represented by your counterpart. Find ways to bridge the culture gap: Apart from adopting the other side's culture to adjust to the situation and environment, we can also try to persuade the other side to use elements of our own culture. In some situations it is also possible to use a combination of both cultures, for example, regarding joint venture businesses. Another possible solution is to adopt a third culture, which can be a strong base for personal relationships. When there is a difficulty in finding common ground, focusing on common professional cultures may be the initiation of business relations. For more on the topic, please refer to your course outline for reading assignments from the text, and link to the sites below: http://www.negotiation.biz/cross_border_negotiations.htm Back To Top Topic 2.3: Interest - Based Negotiations From a Cultural Perspective It is important to understand that culture can make a significant difference and pay attention to its significance when preparing for and entering into negotiations. Remember, interestbased negotiations is premised on each party discovery and seeking a means at satisfying each others interests in order to conclude the negotiations successfully. Often, people just starting to participate cross-cultural business - and even some with extensive experience can make one of two significant mistakes. First, they assume that all of us are basically the same beneath our multi-pigmented skin, exotic clothing and diverse languages and practices, and that we all have identical wants and desires and similar approaches to negotiations and conflict resolution. Those who assert the basic similarity of cultures assume that if "we can just communicate" all problems will evaporate. While this view is less common than it used to be, it is still frequently found in people with little experience working in diverse cultures. It is also prevalent among those who, when abroad, spend most of their time in international enclaves or tourist havens, and among members of dominant cultures who have never had to accommodate or adapt to the cultures of other groups. The second common mistake, currently in vogue, is to romanticize culture and diversity and to treat other cultures as exotic, sacred and deserving of protection from 'cultural imperialism'. Followers of this approach often overemphasize differences between cultures, try to 'go native', make extreme efforts to be 'culturally correct' and try hard to avoid unpardonable errors. Both of these views of culture hold some truth - there are many similarities between cultures and cultures are unique and precious. However, each view represents an unhelpful extreme; the truth probably lies somewhere in between. Cultural differences are important factors in the success or failure of intercultural interactions, yet there are also many similarities among human beings. We must accept that culture plays an important part in interactions between groups, learn how to identify cultural similarities, build upon them and develop strategies that will help to bridge the important differences. It is critical to develop an awareness of how cultural differences influence problem solving and negotiation. Cultures oriented toward individuals generally value individual autonomy, initiative, creativity and authority in decision making. Those more oriented toward collectivism generally value and emphasize group cohesion, harmony and decision making that involves either consultation with group members before deciding, or consideration of the well being of the group over that of the individual. Before entering negotiations it is helpful to know whether a culture is oriented toward individualism or collectivism - in comparison to your personal or organizational culture. Each culture significantly affects how its members define the social situations they face, the problems they encounter and the issues or topics that are important to discuss (or not discuss). The situations that members of any given culture have to handle are often quite similar: raising or buying food; securing shelter; obtaining work to support oneself or a family; contracting marriages; purchasing other needed goods; and interacting with peers, subordinates and superiors. However, the meanings and importance which members of a culture place on these situations may vary tremendously. This causes problems when people from diverse cultures attach different meanings or importance to similar situations. An important element of preparation for any negotiation is to develop a clear understanding of how the other party defines the situation and the issues to be discussed. Needs and interests involve the things individuals and groups require, expect or desire. While all cultures have similar minimal biological needs for survival, they differ significantly as to what they consider to be adequate satisfaction of these needs. So, too, do all individuals have generally similar identity needs, but they differ significantly regarding how and how well these are addressed. Therefore, another critical element of preparation is to develop a tentative understanding or preliminary theory about the needs and interests of the other party - and to become clear about your own. Power and influence have been defined as "the ability to act, to influence an outcome, to get something to happen (not to happen), or to overcome resistance" (Mayer, 2000). Culture influences the preferred forms and sources of power and influence, and how and when they are used. It also often determines the options available when a party has more or less power than another or is in a superior or subordinate position. A slight to someone's spouse by an unknown person in some cultures may result in giving the commenter the 'cold shoulder' or perhaps a quick verbal retort. Good cultural analysis seeks to identify what forms of power and influence are most likely to be used by whom and in which situations. Identifying the broad external factors that influence the development of a specific group's cultural approach to negotiations and conflict resolution can be critical to understanding the influencing factors effecting negotiations. These elements include: (1) the natural environment; (2) history, events, trends and adaptations that have occurred over time; (3) social structures - both intellectual and physical - that people create to adapt to or survive in their environment. These three factors continuously interact and influence one another and the individuals or groups who are members of any given culture. In order to understand why people think and act the way they do, it is helpful to understand how the natural environment and history have shaped their values, views, behaviors and social structures. Educating oneself about a new culture is invaluable toward preparing for negotiations. Once a negotiator has a general understanding of potential cultural similarities or differences in the context of negotiations, it is often helpful to do more detailed research and exploration regarding the other culture and its members. Some of the things that can be done to gain greater understanding about the other culture and to prepare for direct interactions include: Reading a variety of books, magazines, newspaper articles or Internet sources about the culture can provide insight to common interests. If possible, include novels, which often reveal the most about cultural differences. Visual media can help anticipate and prepare to operate in diverse settings and situations, acclimate one to hearing another language and present issues, themes and possible common cultural responses. However, remember to avoid the stereotyping that 'Hollywood' treatments can present; documentaries and movies made in other cultures may come closer to cultural reality. Find and talk with members of the other culture. One of the best preparations for working with members of another culture is to meet someone from their context prior to conducting negotiations or initiating conflict resolution efforts. Foreign students or faculty at universities are often very willing to talk, and welcome the opportunity to converse with others from another culture. They can be invaluable sources of information and orientation since they have usually encountered both parties' cultures. Also, look for local cultural events sponsored or attended by the cultural group of interest. If possible, meet people and get to know some of their cultural behaviors in social settings. For more on the topic, please refer to your course outline for reading assignments from the text, and link to the sites below: http://www.mediate.com/articles/cdr1.cfm Back To Top Week 3 Summary: This section provided a general overview of the material for Week Three. Examined the role that individual characteristics of negotiators play in the bargaining process. Discussed how successful negotiators use persuasive argument to influence the outcome. Described factors for choosing to become a negotiator. Examined the role that culture and cultural differences play in negotiation processes, and what effects they may play in international business transactions. Keywords: cross-cultural; interest-based negotiations; agents; principals; international business; persuasive argument. Practice Question: Name some factors to be considered when preparing for discussions to enter into a joint venture agreement with a foreign business entity